The discovery of a Nb(III)-mediated catalytic hydrogenation of internal alkynes to (Z)-alkenes that proceeds through an unprecedented mechanism is reported. The mechanistic proposal involves initial reduction of the alkyne by the Nb(III) complex (BDI)Nb((NBu)-Bu-t)(CO)(2) to provide a Nb(V) metallacyclopropene, itself capable of sigma-bond metathesis reactivity with H-2. The resulting alkenyl hydride species then undergoes reductive elimination to provide the (Z)-alkene product and regenerate a metal complex in the Nb(III) oxidation state. Support for the proposed mechanism is derived from (i) the dependence of the product selectivity on the relative concentrations of CO and H-2, (ii) the isolation of complexes closely related to those proposed to be part of the catalytic cycle, (iii) H/D crossover experiments, and (iv) DFT studies of multiple possible reaction pathways.